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"Supreme Court Gets Into Split Over Class-Action Arbitrations"
Yesterday's Daily Journal had an article on Discover Bank v. Superior Court, ___ Cal.4th ___ (Jun. 27, 2005) (see my prior post on the case). The article mentions some of the opinions from other courts on class action waiver unconscionability, summarizes the Discover Bank opinion, then criticizes it roundly. The article concludes by saying that "[i]n the end, regardless of whether the California Supreme Court reached the correct result, the debate is sure to rage on until the U.S. Supreme Court issues its pronouncement on the matter."

I cannot agree. The U.S. Supreme Court may someday decide Federal Arbitration Act preemption, but unless its pronouncement is that all state laws relating in any way to arbitration are preempted, Discover Bank resolves any debate concerning the enforceability of class action waivers in consumer contracts of adhesion in California. This is particularly true since, as the Supreme Court observed, many class action waivers simply "waive the right to class action litigation" and have nothing to do with arbitration. (Slip op. at 2.) To the extent Discover Bank resolved the unconscionability of that kind of waiver, the issue is purely a matter of state law and will be unaffected by any U.S. Supreme Court holding.

Couldn't one argue that the Parrish facts are distinguishable from Discover Bank such that the two cases can be harmonized? I read Discover Bank as only barring arbitration agreements that preclude class actions where the end impact is that any incentive to pursue a consumer class action is removed. Didn't Parrish go out of its way to say that was NOT the case under its peculiar facts?